China, Russia say ties flourishing despite crisis

The leaders of China and Russia on Wednesday hailed flourishing ties which they said were defying the economic crisis, after Cold War-era relations marked by mutual suspicion.

"In the midst of the global financial crisis, we are actively developing a practical cooperation in every sphere," Chinese President Hu Jintao told Russian Prime Minister Vladimir Putin at the start of a state visit.

"China will always look at its relations with Russia as a priority of its foreign policy.

"In a time of deep and complex changes, the future development of the Russian-Chinese strategic relations... is particularly important," Hu added.

Putin said that the relationship was now strong enough to overcome the effects of the crisis.

"Despite the global financial crisis, relations between our countries are immune to economic or political ruptures," Putin said.

Such positive rhetoric is a marked change from the from the Cold War era when the Soviet Union and China clashed for supremacy in the Communist world.

Yet bilateral trade has now taken a major hit from the economic crisis, falling 42 per cent to 7.3 billion dollars for the first quarter of 2009 compared to the same period last year, according to Russian officials.

Putin, who had made expanding trade with China a priority for Russia, did not mention these figures, saying only that bilateral trade reached 56 billion dollars in 2008.

The Russian strongman also welcomed Chinese delegation's "very successful" participation at a summit of the Shanghai Cooperation Organisation (SCO) earlier this week in the Russian city of Yekaterinburg.

SCO is a regional grouping of Russia, China and four Central Asian countries that has been seen as a potential counterweight to Western-led international organisations like NATO.

The two leaders were to oversee an intergovernmental meeting on Wednesday and Hu was scheduled to meet Russian President Dmitry Medvedev later in the day.

Diplomatic ties between the two permanent UN Security Council members have been founded on a common stance on issues from Iran and North Korea's nuclear programmes to the Middle East, Sudan and non-proliferation.

Russia and China are also part of a four nation group of emerging economic powers that includes India and Brazil and this week displayed its ambitions in a first summit meeting attended by Hu and Medvedev.

The two countries, which normalised ties in 1989, signed a landmark agreement in 2004 ending long-standing disputes along their 4,250-kilometre (2,635-mile) border.

While they have stepped up competition for influence over energy resources in Central Asia, their cooperation in regional clubs such as the SCO are proof of common ambition to balance US hegemony.

Hu this week flaunted Beijing's economic influence in the SCO, saying China would extend a 10 billion dollar credit to member states during the global crisis.

Both Russia and China have also announced their intention to buy the International Monetary Fund's first-ever bond offer as at least Moscow has declared to the detriment of its dollar bond holdings.